Airborne 12.09.16

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Airborne 12.09.16

But Others Say Consolidation Could Help Industry

One lawmaker concerned about the
effects of a proposed Delta/Northwest merger on his home district
happens to be -- unfortunately for merger proponents -- the
chairman of the House Transportation and Infrastructure
Committee.

Minnesota Congressman James Oberstar said Tuesday he'll try to
persuade the Justice Department's Antitrust Division to kill the
deal, saying it would crush competition.

Apparently not at all shy about using hyperbole, he calls the
merger "the worst development in aviation history," stating the
formation of a mega-airline would result in an environment in which
"the so-called low-fare carriers will not be able to compete."

Oberstar's state includes Northwest's current headquarters in
Minneapolis. The combined carrier would be headquartered in
Atlanta, GA. If he's trying to claim that shift makes this "the
worst development in aviation history," he may not get much backup
from his colleagues.

Cox News Service reports Georgia Senator Johnny Isakson -- who,
perhaps not surprisingly, strongly supports the merger -- predicted
that despite local concerns about job losses, most members of
Congress will support the merger because they fear spreading
bankruptcies.

"The aviation industry is under huge stress," Isakson said,
adding consolidation could ease pressure. That view was generally
echoed by the likes of Pennsylvania Arlen Specter, who said
upcoming anti-trust decisions on the merger "will depend on the
underlying economic facts" of the airline business.

"This is a troubled industry," he added.

One of Oberstar's colleagues from Minnesota, Senator Amy
Klobuchar, plans a hearing in the immediate future with Delta CEO
Richard Anderson, and Northwest CEO Doug Steenland. "I will hold
their feet to the fire to live up to their commitments and show
that any merger is, in fact, in the best interest of Main Street
and not just Wall Street," she said.

It appears the looming debate among lawmakers will pit
provincial interests such as Oberstar's against a much larger
faction... which does not want to face pressures to bail out the
aviation industry with taxpayer money in years to come.